5 Step in2
5.1 The Sub-Contractor warrants to the Authority that the Sub-Contractor shall not terminate or treat as terminated the Sub-Contract (or its employment thereunder), or discontinue the performance of the Sub-Contract Services, without first giving to the Authority not less than thirty (30) Business Days' prior notice of the Sub-Contractor's intention to do so, specifying the grounds for so doing and stating the amount (if any) of monies then outstanding under the Sub-Contract and setting out any other existing liabilities or unperformed obligations of the Service Provider under the Sub-Contract.
5.2 If the Authority serves on the Sub-Contractor a notice in accordance with clause 5.3, the Sub-Contractor shall not terminate or treat as terminated the Sub-Contract (or its employment thereunder), or discontinue the performance of the Sub-Contract Services, but service of such notice shall not prejudice any other right or remedy the Sub-Contractor may have under the Sub-Contract or may acquire by reason of any breach of the obligations of the Authority under this clause 5.
5.3 Within the period of notice referred to in clause 5.1 (as extended pursuant to clause 5.9 (if applicable)) unless the employment of the Sub-Contractor under the Sub-Contract shall have terminated previously, if the Authority serves upon the Sub-Contractor a notice to do so, the Sub-Contractor shall thereafter accept the instructions of the Authority to the exclusion of the Service Provider under the Sub-Contract.
5.4 As against the Service Provider and the Authority, the Sub-Contractor shall be entitled and obliged to rely upon and to comply with such notice served by the Authority under clause 5.3 or clause 5.7, and shall not make any enquiry into the entitlement of the Authority as against the Service Provider to serve such notice.
5.5 As from the date of service of notice under clause 5.3, the Authority shall assume all the rights and (save as referred to in clause 5.6) perform all the obligations of the Service Provider under the Sub-Contract, provided that this shall not affect or derogate from any right of action the Service Provider may have against the Sub-Contractor in respect of any breach of duty of the Sub-Contractor under, or in connection with, the Sub-Contract happening prior to the date of service of notice by the Authority under clause 5.3.
5.6 The Authority shall within fifteen (15) Business Days after serving notice under clause 5.3 or under clause 5.7, pay to the Sub-Contractor an amount equal to the sum then owing to the Sub-Contractor under the Sub-Contract for services properly performed and shall perform any other obligations of the Service Provider which are existing and unperformed as at the date of the notice served under clause 5.3 (and which are capable of performance) and in each case provided that the same are properly set out in the Sub-Contractor's notice given pursuant to clause 5.1, or have properly arisen after the date of service of such notice provided that:
(a) if any such amounts, obligations or liabilities are disputed by the Authority in accordance with the dispute resolution procedure in the Sub-Contract, the Authority shall only pay such amounts, perform such obligations and incur such liabilities found to be due as a result of such procedures; and
(b) the Authority shall not be liable for, nor shall it be obliged to make any payment to the Sub-Contractor in respect of any work and/or services provided nor any materials supplied nor any other claims or demands under the Sub-Contract to the extent that either the Authority has already made payment in respect of the same to the Service Provider pursuant to the Contract or the Authority is liable to make payment in respect of the same to the Service Provider pursuant to the Contract.
5.7 The Sub-Contractor further covenants with the Authority that if the Contract has been terminated or is otherwise of no force or effect or if notice to terminate the Contract has been served, the Sub-Contractor, if requested by the Authority, by notice in writing and subject to clauses 5.5 and 5.6, shall accept the instructions of the Authority to the exclusion of the Service Provider in respect of the Sub-Contract Services upon the terms and conditions of the Sub-Contract and shall, if so requested in writing, enter into a novation agreement whereby the Authority is substituted for the Service Provider under the Sub-Contract or, if the Sub-Contract has been terminated, will enter into a new contract with the Authority on the same terms as the Sub-Contract but with such revisions as are reasonably necessary to reflect altered circumstances.
5.8 Upon payment by the Authority in accordance with clause 5.6 of an amount equal to the relevant sum owing from the Service Provider, the Sub-Contractor shall assign to the Authority all the Sub-Contractor's rights against the Service Provider in respect of such unpaid sum, and shall pay to the Authority any of the same subsequently received by the Sub-Contractor from the Service Provider.
5.9 Where any rights analogous to those granted in this clause 5 are given by the Sub-Contractor in favour of any of the Senior Lenders, the exercise of such rights shall have priority over those granted to the Authority pursuant to clause 5.3. In such case the thirty (30) Business Day notice period referred to in clause 5.1 shall be extended to a period that is twenty (20) Business Days commencing on the earlier of:
(a) the date upon which such rights of the Senior Lenders expire or terminate; or
(b) the date that the Senior Lenders (or any security trustee acting on its behalf) notifies both the Authority and the Sub-Contractor that it does not wish to exercise its rights; or
(c) on the [Step Out Date] under and ascertained in accordance with the agreement entered into between the Sub-Contractor and the Senior Lenders in relation to the Project and as notified to the Authority by the Sub-Contractor and/or the Senior Lenders (or any security trustee acting on its behalf),
and the Authority shall not be entitled to exercise its right to serve notice under clause 5.1 until the earlier of such dates.3
5.10 The Sub-Contractor shall copy to the Authority any notice of intended termination of the Sub-Contract and all other information in relation to such notice provided by the Sub-Contractor to the Senior Lenders at the same time as it is provided to the Senior Lenders.
5.11 The Authority may by notice in writing to the Sub-Contractor appoint another person to exercise its rights under this clause 5, subject to the Authority remaining liable to the Sub-Contractor as guarantor for its appointee in respect of its obligations under this Agreement.
5.12 As from the date of service of notice under clause 5.3 or 5.7 to the extent that the Sub-Contract operates by reference to the existence and application of the Contract, the Sub-Contract shall be administered and construed as though the Contract were continuing and the Sub-Contract shall therefore continue, subject to amendment only as necessary to reflect the fact that the Contract has in fact terminated and the Authority has undertaken the obligations set out in clauses 5.5 and 5.6.
5.13 The provisions of clause 5.1 shall not apply in circumstances where the Contract expires by effuxion of time in accordance with its terms.
5.14 The Service Provider agrees to the foregoing provisions of this clause 5 and agrees to be bound by them.
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2 Step in has the disadvantage of requiring the Authority to pay outstanding sums due to the Sub-Contractor (see clause
3 The provisions of clause